Warren Buffett is considered one of the greatest investors in American history due to his track record with Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). Specifically, Berkshire stock has compounded at roughly 19.8% annually since Buffett took control of the company in 1965, nearly doubling the performance of the S&P 500.
In recent years, one of the most widely discussed aspects of his business has been its sizable stake in Apple (NASDAQ: AAPL). Berkshire began buying shares in 2016. Whether the original purchase was made by Buffett or his understudies is unknown, but Buffett likely controlled the position as it grew in size over the years, and he is likely responsible for trimming the position in recent quarters.
Q4 2023: Apple accounted for 49% of Berkshire Hathaway’s stock portfolio.
Q1 2024: Apple accounted for 40% of Berkshire Hathaway’s stock portfolio.
Q2 2024: Apple accounted for 30% of Berkshire Hathaway’s stock portfolio.
In May 2023, Buffett said, “Apple is different than the other businesses we own. It just happens to be a better business.” That statement is seemingly at odds with the recent selling spree. CNBC estimates that Berkshire’s stake in Apple declined to 400 million shares in June 2024, a 55% reduction from 905 million shares in December 2023.
However, Buffett’s conviction in another megacap company has not wavered. He has repurchased shares of Berkshire Hathaway stock in each of the last three quarters, spending a collective $5 billion on buybacks. The message is clear: Buffett believes Berkshire is undervalued.
1. Apple
Apple has cultivated immense pricing power by pairing trendy hardware with proprietary software and services, creating a closed ecosystem that other manufacturers cannot replicate. Indeed, the average iPhone sells for three times more than the average Android smartphone. Apple has a strong presence in smartphones, personal computers, tablets, and smartwatches, and the company also operates the leading mobile app store and it has one of the fastest-growing advertising businesses in the U.S.
Apple reported lackluster financial…
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